Plan Now or Pay Later: Proactive “Talent War” Tips

Carl Kutsmode, Capital H Group
December 11, 2007 | COMMENTS

For many organizations, the new-year budget-planning process is a game of logical “guesstimating,” inspired by gut intuition, and for the lucky few, justified by actual historical performance metrics. With talent shortages beginning to take solid foothold in nearly all industries, include the following four considerations in your planning if you intend to continue to compete effectively for top talent:

1. Plan on spending more for your internal recruiters as RPO (recruitment process outsourcing) firms are fast becoming corporate HR departments' biggest competitors for experienced corporate recruiters.

The highly competitive compensation, variety of work assignments, and entrepreneurial cultures offered by many RPO providers can make them a more attractive workplace than “in-house” at a corporation. As recruiting is a 24/7 activity, employers seeking to hire and retain top recruiting talent need to consider abandoning their traditional view of the recruiting role as a 9-5, desk-bound job. The flexibility and quality of life appeal of a more virtual recruiting model will allow employers an opportunity to attract top recruiting talent at modestly competitive compensation rates with increased performance and retention.

2. Expect higher turnover in sales and critical skills talent.

Many people who accepted less-than-ideal employment opportunities during times of economic stress are now feeling confident enough in their financial position to begin to explore more attractive employer options. In other words, they are “dis-engaged” and many of them are polishing resumes. Companies who are not paying attention to employee engagement will see a significant exodus of those talented people who have tolerated undesirable work schedules, below-market compensation, or two-hour commutes to the office. Salespeople, in particular, will be coming off a few good years of steady economic growth and significant increases to their standard of living. Companies need to evaluate merit pay and reassess key staff compensation to be sure they remain market competitive. Consider special-recognition bonuses for exceptional performers as a proactive gesture to reinforce your appreciation of star employees' efforts.

3. Seriously consider standardizing and streamlining all recruiting related systems, processes and metrics reporting activities.

With EEO and OFCCP government scrutiny on corporate tracking and reporting of Internet job-applicant data, companies may be at risk of noncompliance. Government contractors, in particular, risk losing their contracts if found noncompliant in their applicant data tracking and reporting practices. In addition to compliance issues, it's clear that as the talent war intensifies, companies operating at optimum efficiency will be best positioned to win based upon their ability to identify, qualify, interview, and hire top talent FAST.

Employers seeking to optimize their recruiting efforts should start with an assessment of operational and staff strengths, gaps, and opportunities in their current recruiting practices, and compare them to industry benchmark and best practice data. This provides a solid blueprint by which informed technology, process, staff and organizational change decisions can be made.

4. Value recruiting and retention as your number-one corporate mission!

It is a well-documented statistic that it costs a minimum of two times the annual salary to replace an employee who leaves your company. The talent war is real. Focus on understanding and addressing the “root cause” of your turnover. Exit interviews conducted by a third party or through anonymous data collection methods provide a good first step into gaining insights into the root cause of employee turnover. Recruiting and retaining a diverse employee population is also core to a company's ability to compete effectively in a global marketplace. Cross-cultural diversity awareness and inclusion programming should be woven into all aspects of a company's recruiting practices to ensure unbiased assessment, interviewing, and selection decisions. In the future, shifting from a reactive to a proactive recruiting business model is key to minimizing talent-related costs and achieving overall business financial performance goals. If talent trends continue in the direction we are seeing, the recruiting function could become one of your most critical functions. To do that, recruiting needs to be involved in workforce planning and strategic business planning now in order to plan and anticipate your future talent needs.

Capital H Group is a consulting firm that takes a value-based approach to helping companies manage, and invest in, their human capital. Visit www.capitalhgroup.com for more details.